The Daily bulletin. [volume] (Honolulu [Hawaii]) 1882-1895, 1887-06-27

March 3lst, 1887.
We call upon the Government to
state through the Advertiser or
otherwise the precise nature Of these
expenses. and whether or not there
has not been charged to the loan
account advances to the financial
agents of the Government for travel
ling or personal expenses. If such
advances were made, and if they
are TO charged, the amount must be
restored TO the loan whether the
AuditofGen approved or not;
but inasmuch as the taxpayers will
he called upon to make good this
illegal expenditure they are entitled
to know the precise amount they
must contribute for wholly unnoces-
sary personal services.
The sum total of this class of
charges is so much money wasted,
for which Ministers should be held
responsible personally, because the
law does not contemplate any such
expenditure. But this is not the
worst feature of the business by any
means. Through its bungling and
and neglect the Government has
paid - percent interest on $500, 900
for about four months, not to be
particular about days, and also II
percent on 5000, 900 for five months,
where it should only have paid 6
percent. This represents q loss to
the Treasury in round figures of
S1l 900, if the statement of time be
measurably exact, and we should
like to know how that item of waste
will appear in the Treasury accounts.
The transaction is all the more cen
surable when ii is stated that this
loss to the Treasury was incurred in
an exchange of half a million six
percent bonds payable in twenty
wears for a similar amount of six
percent bonds payable in thirty
years.
Nor does even this amout repre-
sent the waste upon the conversion
of these six percent bonds into
other six percents. The London
Syndicate and financial agents came
in for their commission of percent,
plus percent on the amount of the
bonds at 9S, or syndicate rates. The
loan was reported negotiated towards
the close of 1886, but interest is
calculated in months from January
1st, 1887, for facility of illustration.
The account may be stated thus:
Expense TO the country in
converting the Spreckels
per cents. ts.............. .fJOu,OUU
Into Syndicate 6 per cents 100000
Loss on interest by Govern
ment say ................T ll,OOO
Syndicate Commission, 8 per-
cent. .................. 25,O0O
Shave OF percent on bonds, 10000
|
Total expense and loss $4,000
To which must be added exchange
to San Francisco, cable messages,
etc. We have therefore $29, $40
expenses at Honolulu for negotiat-
ing $500, 900 of the loan, and
$4,000 at the very least, incidental
to borrowing $1,000 at London TO
recall the Spreckels' bonds and re-
place them by other six pcrconts,
making in all S75, $40, or nearly s
percent on one million. When ex-
change, etc., are added, the actual
cost to the Government on the first
million accounted for at the Treas
ury, without counting printing and
preparing bonds, extra clerical as
sistance and other minor expenses,
will be fully eight percent. This is
three percent in excess of the limit
for expenses fixed by law.
We have in this presentation one
result of London syndicate financing
combined with the bungling incom-
petcnce of the Administration.
When it is stated, however, that the
Spreckels' bonds might have been
purchased here at Honolulu at q
heavy discount for cash, immediately
after the amended Loan Act was
passed, and that the offer was re-
jected by the acting financial agent
at that time, the magnitude of the
swindlc subsequently, perpetrated
upon the public In this single trans
action may be seen at a glance. A
large sum might have been saved to
the Government on the bonds them
selves, MS well as some @ll ,0oQ, more
or less, IN interest but the financial
agents of the Government and the
op1on SVuliDotn rnulI nat b.,,n